There is a problem with the iPhone 4. It is not something that somebody just made up. So even though Apple has reversed its very strict policies on no free bumper cases and no restocking fee waiver, somehow Steve Jobs was still able to present himself as superior to everyone else and that any problems anyone had weren't his fault. Instead of expressing any sort of disappointment over the fact that it sold millions of people a phone that Consumer Reports is unable to recommend, Jobs threw out some statistics that made reporters look foolish for saying anything about this story. Jobs said that everyone in the smartphone industry makes mistakes, so there's no reason to criticize the iPhone 4.
So, the iPhone 4 is a cool device. No one denies that. For the millions who went to the trouble of waiting in line to get one, a problem that drops signal strength every now and then is not going to be enough to return the phone. It is going to be an ongoing annoyance, though, and the fact is that more calls are being dropped on the iPhone 4 than on any other iPhone (even if it is just a small margin).
Even though Jobs was originally very adamant about not giving free bumper cases to anyone, he turned around and changed his mind.
I don't think Jobs understood why this story became, as he put it, so blown out of proportion. Of course, it was noteworthy because the design of the iPhone 4 is different from other smartphones. Most phones embed their antenna in a spot on the phone that most people would never touch. Apple, though, put it right on the side of the device, where almost everyone is going to hold the phone when they make a call.
However, the real reason this story exploded is because of Apple's arrogance, an attribute that did not change after today's press conference. When Steve Jobs just says everyone is holding the phone the wrong way, that if users lose reception then it's their fault, that won't sit well with most people. When people want to keep their $200 phone that they waited in line 24 hours to get, and all they want is a $10 case to fix whatever small problem there may be, and Jobs takes the time out of his day to prevent that from happening, that story will get reported.
Had Apple just come forward and apologized that some users, even if it was just a small amount, were experiencing problems with their new iPhone, and offered no-fee refunds and bumper cases right away, this story would not have exploded the way it did. Jobs blamed the news media for exacerbating this story out of proportion, but in reality it was more his doing than anything else.